A recently conducted study has indicated that persons aged between 18 and 34 years remain optimistic over the British economy, despite the fears broug
A recently conducted study has indicated that persons aged between 18 and 34 years remain optimistic over the British economy, despite the fears brought about by Brexit. Several months after the EU referendum, the measure of consumer confidence still remained high among those interviewed.
The Deliotte Consumer Tracker Report
Based on Deloitte Consumer Tracker (Q 4.2016 PDF), the confidence of the people remained strong and resilient, particularly among persons falling under 18 to 34 age bracket. It is so far the highest since the Tracker began conducting studies about 6 years ago. The recovery can be attributed to a growing confidence regarding key aspects of the economy such as disposable income and debt, job security, job opportunities as well as career progression. Five out of the six key economic indicators, which make up the confidence index, rose significantly within the past year. The level of job security reportedly remained the same, at 4 percent, which clearly indicates that Brexit didn’t affect the consumer’s confidence regarding opportunities.
Increase in Spending
Tracker report indicated that consumer patterns with regard to spending had not changed to the negative. In fact, it reported significant growth in the essential and discretionary spending, Q3 2016. The net essential spending rose by 7 percentage points while discretionary category experienced a 2 percent increase in terms of points, compared to Q3 2016.
As much as Britain still maintains its position in the Fin Tech lead, the report says the upbeat might continue to dwindle as we enter 2017. Consumer confidence on disposable income experienced a major drop in Q4 2016 as compared to Q3 2016(from -12 to -14 percent). The report clearly predicts the start of squeezed consumer ability in terms of spending. With higher inflation and weaker pound, the economic situation might be headed for the worse.
Expected Opposing Economic Forces after Brexit
Brexit referendum results have sent mixed signals as to the impact it will cause during the year. However, the most recent survey by Deloitte’s UK financial officer indicates that corporate perception since Brexit remains high. That means CFOs will usher in the New Year with key defensive strategies like building up of cash and cost reduction.
The formal Brexit process is set to begin in March with higher inflation expected to hit the economy. That will bring greater impact on people’s spending and consumers have to face some headwinds during the year. And as time goes by, we will continue to see how much UK’s exit from EU will impact consumer confidence in the coming years.